This case is particularly relevant to those consumers who have survived the Christmas rush and are now rapidly putting goods on lay-by during the post-Christmas sales.

Whilst consumers are very aware of the lay-by process, consumers may not be so aware of their rights and obligations under the Australian Consumer Law (ACL) so far as lay-bys are concerned. Specifically, under the ACL:

consumers have a right to terminate a lay-by at any time prior to delivery of the goods;

any lay-by termination fee charged by the retailer cannot exceed the retailer’s reasonable costs resulting from the termination of the lay-by;

the amount of the termination fee should be clearly stated in the lay-by agreement;

the retailer must refund the deposit and all other amounts paid (less the termination fee) if the consumer terminates the lay-by;

if the consumer terminates the lay-by and the total amount paid on the lay-by does not cover the termination fee, the consumer is required to pay the termination fee.

Importantly, consumers must ensure that they request a copy of the lay-by agreement, and become familiar with the terms and conditions of the lay-by agreement. It will be crucial to have a copy of the lay-by agreement, together with all receipts for payments made, if a dispute arises down the track.

The ACCC is clearly coming down on retailers with increasing force and are imposing significant penalties for breaches of the ACL. By being familiar with their rights under the ACL, consumers can take advantage of this pro-activeness of the ACCC.

If you believe that your rights under the ACL have been breached, please contact: